Site Mobile Navigation

Indiana Law to Cut Planned Parenthood Funding Is Blocked

WASHINGTON — A federal judge ruled Friday that the State of Indiana could not cut off money for Planned Parenthood clinics providing health care to low-income women on Medicaid.

The judge, Tanya Walton Pratt of the Federal District Court in Indianapolis, blocked provisions of a new state law that penalized Planned Parenthood because some of its clinics performed abortions. The law, she said, conflicts with the federal Medicaid statute, which generally allows Medicaid beneficiaries to choose their health care providers.

In issuing a preliminary injunction late Friday, Judge Pratt said the state law “will exact a devastating financial toll on Planned Parenthood of Indiana and hinder its ability to continue serving patients’ general health needs.”

The law took effect immediately when it was signed on May 10 by Gov. Mitch Daniels, a Republican.

As of June 20, the judge said, Planned Parenthood of Indiana stopped treating its Medicaid patients and laid off two of its three specialists in sexually transmitted diseases. The judge said that “only a small percentage” of Planned Parenthood’s services involved abortion.

“States do not have carte blanche to expel otherwise competent Medicaid providers,” Judge Pratt said. And “there are no allegations that Planned Parenthood of Indiana is incompetent or that it provides inappropriate or inadequate care.”

The ruling has national significance. At least a half-dozen states have taken aim at Planned Parenthood because its clinics perform abortions, about one-fourth of all those performed in the United States.

Judge Pratt gave “some measure of deference” to a ruling by the Obama administration, which on June 1 denied approval for the changes that Indiana wanted to make in its Medicaid program.

The federal government could terminate some or all of Indiana’s Medicaid money if the state persisted in violating federal Medicaid law.

“The public interest tilts in favor of granting an injunction,” Judge Pratt declared. “The federal government has threatened partial or total withholding of federal Medicaid dollars to the State of Indiana, which could total well over $5 billion annually and affect nearly one million Hoosiers.”

An error has occurred. Please try again later.

You are already subscribed to this email.

Moreover, she said: “Denying the injunction could pit the federal government against the State of Indiana in a high-stakes political impasse. And if dogma trumps pragmatism and neither side budges, Indiana’s most vulnerable citizens could end up paying the price as the collateral damage of a partisan battle.”

Marcus J. Barlow, a spokesman for the Indiana Family and Social Services Administration, said the state would comply with the preliminary injunction, but could also appeal.

Bryan Corbin, a spokesman for the Indiana attorney general, Greg Zoeller, said the state was likely to seek review by the United States Court of Appeals for the Seventh Circuit, in Chicago.

Since the law was signed, Judge Pratt said, Planned Parenthood of Indiana has seen a surge in donations from supporters. But, she said, “these donations were something of an aberration.”

“Common sense suggests that as headlines fade, passions will cool and donations will level off,” the judge said. “Thus, with the passage of time, Planned Parenthood of Indiana will be forced to confront the dire financial effects” of the new state law.

State officials argued that Indiana could exclude Planned Parenthood from its Medicaid program because states have the authority to determine who is a “qualified” provider. But, the judge said, that determination cannot be based on factors unrelated to a provider’s Medicaid services.

For years, federal law has banned the use of Medicaid money to pay for abortion except in certain cases of rape or incest or danger to the life of a pregnant woman.

The Indiana law goes much further. It prohibits state agencies from entering contracts with or making grants to “any entity that performs abortions or maintains or operates a facility where abortions are performed.” It also terminates existing state contracts with such entities. The law does not apply to hospitals.

Planned Parenthood of Indiana and two of its patients filed the suit, challenging the new restrictions as “a blatant violation” of federal law. Judge Pratt agreed, finding the Indiana measure “unlawfully narrows Medicaid recipients’ choice of qualified providers.”

A version of this article appears in print on June 25, 2011, on Page A11 of the New York edition with the headline: Indiana Law to Cut Planned Parenthood Funding Is Blocked. Order Reprints|Today's Paper|Subscribe